Two major Asian private equity companies are investing $150 million to build five office towers in Clark Freeport Zone, a move that may transform Clark into an office and logistics hub.
Hong Kong-based ADM Capital and BPE Asia Real Estate in a statement announced the closing of an initial $150-million investment to finance the construction of Grade A office buildings and surrounding infrastructure within the 177-hectare Global Gateway Logistics City in Clark.
ADM Capital is a fund manager with headquarters in Hong Kong, while BPE Asia Real Estate is an affiliate of Baring Private Equity Asia.
ADM Capital and BPE Asia are leading a consortium of investors providing the cornerstone capital for the construction of office buildings with a gross floor area of 142,000 square meters. The buildings are expected to meet the need of multinational companies and business process outsourcing companies in Central Luzon.
ADM Capital chief executive Christopher Botsford and BPE Asia managing director and head of real estate Mark Fogie said the investment was expected to provide high-quality office space in Clark in support of the area’s economic development.
“We have been involved with KGLI on the GGLC site for some time, having funded The Medical City building and are pleased to continue working with KGLI in the construction of their office buildings within the park, bringing much needed high-quality office space to the Clark area,” Botsford said.
Fogie said the strong demand for office space in Metro Manila had resulted in high occupancy and rising rental costs, prompting tenants and new entrants to look at secondary markets such as Cebu and Clark.
“The Clark area is well-positioned to thrive, given good accessibility and rents that are approximately half that of Metro Manila. With our own development and construction expertise in-house, BPE Asia looks forward to working closely with KGLI to deliver this high-quality project,” Fogie said.
The project, located across The Medical City Clark Hospital, will be the first office buildings constructed on the GGLC site, which when completed will provide 5.8 million square meters of office, logistics, industrial and supporting retail and hotel space.
KGL Investment Co., a Kuwaiti company, is developing GGLC, a well-designed and master-planned office and logistics district strategically located next to the Clark International Airport.
The company started the development of the 177-hectare GGLC, with the construction of state-of-the-art The Medical City Clark, which was also co-funded by ADM Capital and BPE Asia.
KGLI said construction of the first phase of office buildings was expected to start in November 2015, with pre-leasing arrangement already underway.
The Philippines has emerged as one of the fastest growing real estate markets in Asia, powered by the expansion of the BPO and outsourcing sector.